Page 6 - Food & Drink Business Magazine March 2019

NEWS
Coles invests $1bn into automated distribution
Food industry M&As ramp up
LOCAL food and beverage industry mergers and acquisitions continued to climb last year with the number of deals exceeding that of 2017.
According to an annual review of Australian and New Zealand transactions by Comet Line Consulting, 52 transactions took place in 2018 compared to 44 in 2017, with most falling in the $10 million to $100 million enterprise value range.
2018 also saw increased private equity participation in transactions as well as family office investors in the food and beverage industry, according to Comet Line Consulting. Eighteen of the 52 transactions announced in 2018 – 35 per cent – involved financial investors such as private equity or family office investors, compared to 30 per cent in 2017.
In 2018, however, there were fewer large transactions, with only two valued in excess of $400 million – NZ poultry company Tegel, which was bought by Philippines counterpart Bounty Fresh Food for $NZ438 million, and vitamin company Nature’s Care, which was bought by a Chinese investor group for an estimated $800 million.
2018 also saw a significant decrease in number of IPOs, with just three taking place: Marley Spoon, Keytone Dairy, and Angel Seafood, compared to eight in 2017. However, $93 million was raised by companies listing on the ASX in 2018, compared to $80 million in 2017. In 2016, in contrast, $1 billion was raised by food and beverage companies listingontheASX. ✷
COLES Group has announced plans to boost its efficiency through the development of two new automated ambient distribution centres.
The two centres will be located in Brisbane and Sydney and will cost a combined $950 million over six years.
Coles says it aims to boost product availability for customers and cost efficiencies through the two projects.
German automation company Witron will supply the automation systems, and Coles has also entered into
20 year lease agreements with Goodman Group and Brickworks for the development of the distribution centres.
“With the signing of these important contracts, Coles is one step closer to implementing
a key element of its supply chain modernisation strategy,” Coles CEO Steven Cain said.
“This will provide a safer working environment for our team members, lower supply chain costs, enhance our overall business competitiveness and make life easier for our customers by having the right
offer in the right location.” The closure of existing
distribution centres over a five-year period will result in $146 million in costs related to lease exits and redundancies, the supermarket giant says, which will be reflected as a pre-tax provision in its 2019 interim result. ✷
Return of the Polly Waffle
THE Polly Waffle is making a comeback thanks to South Australian confectioner Robern Menz which has bought the brand off Nestlé.
The agreement sees the fourth generation family- owned Australian confectionery company acquire the brand, which quietly disappeared from Aussie shelves a decade ago, as well as the trademark and the recipe.
The acquisition comes just 12 months after Robert Menz bought Violet Crumble from Nestlé, which the company re-introduced in October of last year.
Since taking over the Violet Crumble brand, the company says it has been bombarded with requests to bring back the Polly Waffle bar.
“With production ceasing almost 10 years ago, Polly Waffle has entered into the territory
of Australian legend,” said
Robern Menz CEO Phil Sims (pictured below).
“As an Australian family- owned business, we have a real affinity for local brands and to have the opportunity to revive them and bring them back into the market is such a privilege.”
Polly Waffle was created by Melbourne-based business Hoadley’s Chocolate in 1947 and was acquired by UK-based confectioner Rowntrees in 1972. Swiss-based Nestlé bought it with the Rowntree Hoadley’s business in
1988 and the Polly Waffle chocolate bar was discontinued in 2009.
“Polly Waffle is one of those iconic brands that despite its absence from market still
has a loyal following,” Nestlé business executive officer – confectionery Chris O’Donnell said. “We wish Robern Menz the best of luck in bringing it back and giving Australia’s Polly Waffle lovers the opportunity to enjoy it once again.” ✷
6 | Food&Drink business | March 2019 | www.foodanddrinkbusiness.com.au